The Managing Director of the Bulk Oil Storage and Transportation Company Limited (BOST), Dr. Edwin Alfred Provencal, has strongly asserted that the Gold for Oil policy has been instrumental in preventing potential fuel shortages, similar to those currently affecting Nigeria.
He emphasized that the programme has proven its effectiveness since its inception, countering scepticism from some industry analysts who have called for its discontinuation.
Speaking to Citi Business News, Dr Provencal highlighted the positive impact of the programme on economic growth, underscoring its critical role in stabilizing the fuel supply in the country.
“The forex response to different stimuli but in a nutshell gold for oil has been extremely successful because without the gold for oil, there would have been serious shortages in this country and prices of fuel products would have gotten to about 35 or 40 cedis.”
Gold for oil has ensured that even though the prices are a little bit on the high side, the fuel is available as compared to some of our neighbouring countries and prices are below what was recorded in November 2022.”
The Gold for Oil Programme formally kicked off on January 15, 2023, with the arrival of the first consignment of about 40,000 metric tonnes of diesel valued at $40 million.
The prime objective of the programme is to use additional foreign exchange resources from the Bank of Ghana’s Domestic Gold Purchase (DGP) programme to provide foreign currency for the importation of petroleum products for the country which currently stands at about US$350 million per month.
Under the Barter Channel, suppliers willing to take gold in direct exchange for petroleum products will be provided with the equivalent volume of gold by the Bank of Ghana.
The programme allowed the Bank of Ghana and International Oil Trading Companies to open Gold Metal Accounts in a mutually agreed gold refinery for gold transfer.
Payment for oil supply is to be done in two channels: by way of barter trade where gold is exchanged for oil or via broker channel where the gold is converted into cash and paid to the supplier.
